The business of mortgages has changed so drastically from what it was not too long ago. Consumers are finding that very few borrowers are able to qualify and be approved for a mortgage today as lending standards have tightened. Even refinancing an existing loan has become tedious and more difficult. As more applications are rejected and less approved, consumers need to be aware of what hurdles they need to cross in order to be approved.

As underwriting guidelines have become stricter and lending tight, borrowers need higher credit scores, higher down payments and more income to qualify for a mortgage. The average credit score that lenders are requiring is above 700. Anything lower than that will result in a higher interest rate and additional fees.Any income will need to be verified as well as assets. These are not only are verified at the initial application of the mortgage. Many lenders are re-verifying credit, income, employment and assets right before closing. Borrowers need to know that they should not apply for or use additional credit prior to closing on their loan. In addition, they should not use any assets reported on their application or change jobs. Doing any of these things, can cancel out their mortgage right at the closing date.

As home prices have dropped and appraisals are coming in low, many borrowers have been pushed out of the refinance market due to the loan to value. In these circumstances, the only thing a borrower can do is to brig money to the table and pay down the existing mortgage in order to refinance. This has put many people out of the refinance market.

Business owners and self employed consumers are also finding themselves left out of the mortgage market. This group of people often used the stated income loans which have now been renamed "liar loans". Many honest, hard working people cannot get mortgages today because these types of loans have just about disappeared.

Those opting for purchasing in a condo development are also facing obstacles. In addition to borrowers being approved, lenders are now requiring that the condo be approved. Condo documents such as cash reserves, owner occupancy rates, monthly assessments, etc. must all meet lender standards.

In the coming months, many more changes will take effect as financial reform is accepted and put into place. With this reform, there will be additional changes made by Fannie Mae, Freddie Max and FHA. It is important for borrowers to keep updated on these changes if they intend on refinancing or purchasing a home in the near future so as to make the process somewhat less stressful.